The Weekly Roundup: The Extrajurisdictional Edition

• Published date: 02 August 2022
• Law Firm: 1 Chancery Lane
• Author: Ms Sarah Prager and Andrew Spencer

Two cases caught our eye this week, both relating to issues around service outside the jurisdiction, which as you would expect has been something of a talking point in the courts since Exit Day. The first involves the unusual situation where a party seeks third party disclosure against an entity based abroad; the second arose out of less uncommonly seen failure to serve proceedings on a foreign Defendant within the lifetime of the claim form.

Somewhere Beyond the Sea: Orders for Non-party Disclosure against Parties Resident out of the Jurisdiction

Can an application for non-party disclosure be made against a party outside the jurisdiction? And when should permission for service out of such an application be granted?

These issues were considered last week in Gorbachev v Guriev [2022] EWHC 1907. One issue in the underlying claim related to how two Cypriot trusts had supported the Defendant. These trusts had engaged English solicitors to advise them, and those solicitors held the documents the Claimant sought. The Claimant sought an order for non-party disclosure against the English solicitors, and the Cypriot trustees. This required the court to grant permission to serve the application on the trustees, out of the jurisdiction. This was granted at first instance. The Cypriot trustees appealed to Jacobs J.

The trustees argued that there was no power to order non-party disclosure against a party out of the jurisdiction; and that if there were such a power the discretion to make the order should not be exercised, because the proper means to bring applications against third parties overseas was by means of the letter of request regime (as explained by Cockerill J in Nix v Emerdata Ltd [2022] EWHC 718 (Comm)).

It was common ground that, for permission to serve out to be granted, the rules for service set out in CPR 6.39 had to be met, notably, the requirement that there was a good arguable case that the application fell in one of the "gateways" in paragraph 3.1 of Practice Direction 6B.

The Claimant relied on Gateway 20 - that the claim was made under an enactment allowing proceedings to be brought, and these not being covered by any of the other grounds.

The judge rejected the trustees' arguments that this application was not a "claim" or "proceedings", and also rejected the argument that Section 34 of the Senior Courts Act 1981 did not permit such an application against an overseas third party.

The result was that the court had the jurisdiction to allow service out. But should the discretion be exercised?

In Nix the court noted that service out is an interference with the sovereignty of other countries. Serving out involves courts in this jurisdiction demanding that persons overseas obey the sovereign authority of the courts...